Does anyone have a Plan B....

tigertiger72

This is a followup from my "fraud" thread. I am grateful for all those who took the time to reply.


Because we could afford it, we were considering "a solution that was less than honest" - the risk would have been on us, but it was financially logical and in the longterm affordable. However the very fact that I am here and asking is because that niggly conscience thingy was getting in the way! However I could think of no other solution - it just seems crazy to have unused assets overseas which are sitting there doing nothing!

So the facts of this now aborted proposal were:
Salary - 90K increasing year on year with probable bonuses of 10K+.
House price: 825K (clearly out of reach by conventional means!)

Mortgage offer from Germany: 460K - this is against 1 house and 3 flats - all owned. This is conservative - the houses are worth more! The flats bring in an income circa 1500euros total. (we could rent the house but would prefer not to).APR on mortgage 5% for 10years fixed.

Mortgage needed in uk: 425K - doable in isolation. Probably in a competitive offset mortgage eg Intelligent Finance.

We have no other loans/ overdrafts.....

Money in account to offset this - 200K profit from sale of current house. 60K from German loan. 30K already in bank. So that would be circa 250K against 425K (allowing for expenses in moving etc). We want to keep this back initially as a cushion, and something to live on as we would be dependent on part of this for the first 2-3 years before my income rose further to break even. The projected balance would not go less than 200K for 5 years. We calculate our average negative balance per month is 1-1.5K initially, decreasing each year.

So, this solution will not work because of the ethical and lawful implications of it - however is there a way in which this might work in any way, shape or form. I could not think of any other before, and this might be the answer - there is no way....but I am open to suggestions!

TigerTiger

Emmzi

In all honesty? The budget looks overstretched to me. I would seriously think again about realising capital on some of the German property by selling it. It reduces risk to the lender.

However... you're looking for a salary multiplier of 5 times. Do companies do this? Yes.

However, you need todemonstrate that the German properties are self funding i.e. the rental income covers all loan repayments, with a bit of slack and no dependancy on your income. And that looks optomistic to me.

What do you reckon you'd have left after all loans and bills paid each month, adding on say 10% extra in case interest rates go mad, allowing for maintenance on bigger house, etc? Is there enough slack for an affordability lender to look at it?

How secure is your employment? Could your wife take a job to get the income up? (Got to sacrifice for our dreams!!)

I guess I'm concerned about price of dreamhouse vs quality of life - not that it's my business, just it'd be my personal concern!

Mr_helpful

I cant see much problem. yes you should declare the loans in Germany and personally I would let out the house. Some lenders will probably discard them. Off the top of my head I expect there are even some forms which dont ask about other mortgages. they shouldnt show up on credit check as it only covers Uk. But as other posters have said make sure you can afford it all.

Rick62

Sounds fine to me. Given you have some income from the German properties, with potential to increase that income if you needed to lenders would either ignore the german mortgage or take the net shortfall versus your affordability calculation.

IF sounds perfect for your circumstances, they would probably advance the £425k that you seek, although I'm not entirely clear why you want that much, have you got your current place under offer? A good broker will have a strong relationship with their business manager at IF, which will aid in how to present your circumstances the best way and help the whole process.

Best to get an application in principle in and see what they offer, then you know clearly what the options are.